Fred Feldman
July 14, 2008
Cuba’s June 11 announcement of modifications to its wage structure to introduce productivity incentives has aroused a great deal of critical comment among radicals and socialists. The issues are sharply posed in “Of Pay and Productivity: Is Cuba Done With Equality?” an article by Moshe Adler in Counterpunch, a radical U.S.-based webzine.
The debate is influenced by misrepresentation by the capitalist media.
Thus, the New York Times began its initial report on the new wage incentive by saying this was the first radical change in the Cuban wage structure since 1959, when Castro decreed that all Cuban workers would receive the same wage. This is a complete fantasy. No such decree was ever issued, and there have been many changes in the wage structure as significant as this one.
An Agence France Presse article claimed, “For years the pay for street sweepers and brain surgeons has been separated by just a few dollars a month.” An urban legend, pure and simple.
Pro-capitalist course in Cuba?
In contrast to the bourgeois media, Adler is genuinely sorrowful about the sad fate awaiting the Cubans as a result of this wage reform.
As for myself, I have learned to value the opinions of the leaders of revolutionary Cuba who have managed with considerable skill and thoughtfulness overall in a wide variety of challenging situations. As a result the revolution has survived longer than any of this kind in history. So I approach their actions with a certain respect.
Adler begins with a ringing proclamation: “The Communist Party of Cuba … has just announced that from now on wages in Cuba will not be determined by the government, which kept them nearly equal, but by workers’ productivity.” Exciting, no? But he doesn’t stop there:
“Of course, since it was the Party itself that made this change, ideologically this is as momentous as the fall of the Berlin Wall.” Hot puppies!
This proclamation of a world-historic shift is based on a statement that is factually inaccurate.
The Cuban government has not surrendered control of wages to the market, to productivity statistics, or to anything else. The Cuban government proclaimed the new wage incentive for increasing production. If they concluded this was not was called for, they could rescind it tomorrow.
This measure does not abandon government direction in regard to wages and can be modified by the government as and when it thinks best. In almost any capitalist country today, this wage decree by a government would be considered as intolerable micromanagement, not the surrender of all control.
End of equality as social goal?
“That this is an ideological defeat for equality and for communism there can be no doubt,” writes Adler.
Does the measure overturn a condition of near-complete equality which existed up till now? No. Nor does it reverse the long-term course toward equality in Cuba, which continues to advance in some rather important areas such as women’s and gay rights? Again, no.
The issue is complicated by negative references in Cuban economic debates to what is called “equalitarianism.” The term is not new there. It refers to efforts to prioritize the creation of immediate simon-pure equality above everything else that is needful, regardless of the real practical social or economic consequences. This can actually have destructive and demoralizing consequences in a transitional (still far from fully socialist or communist) society.
Che and material incentives
Che Guevara also used the term, in that sense, contrary to the portrayals of him in the capitalist media and sometimes on the left as a simon-pure utopian “equalitarian.”
In a letter to the Guardian, Helen Yaffe neatly punctures the myth of wage equality in Cuba, as well as the misrepresentation of Che Guevara that identifies him with this fictional utopia. She points out that the real revolutionary Cuba was different and had to be:
“In reality, there has never been an ‘egalitarian wage system’ (i.e. one where every worker was paid the same): Che Guevara himself devised a new salary scale, introduced in 1964, with 24 different basic wage levels, plus a 15% bonus for over-completion. This scale … linked wages to qualifications, creating an incentive to training, which was vital given the exodus of professionals and low educational level of Cuba’s workers….
“The new pay regulations were introduced to standardize salary policy across the economy as part of the general implementation of the economic management system operating in army enterprises since 1987. Capped or not, bonus payments in Cuba are awarded for outperforming the national plan in the production of physical goods or services. Your article did not mention the fact that these payments remain capped at 30% of salary for various bureaucrats, technicians and economists — a measure to prevent the emergence of a technocratic elite.
“The new salary incentives — to increase internal production and productivity, particularly in agriculture and exports — reflect Cuba’s push to reduce vulnerability to the global food price crisis, rather than a return to capitalism.”
Cuba is still on road to greater equality. The incentive pay increase need not mark, in and of itself, a radical expansion of the current wage differentiations in the working class, nor make stratification of the working class in particular or the society in general radically wider and more explosive. The trend may well be toward a general increase in wages and living standards, stemming in part from a rise in productivity.
There is no necessary tendency of the wage incentive to divide the working class along hostile lines, as incentives to intensified and more efficient labor can and do entail in the United States. In Cuba, increased production and relative prosperity has consistently tended to strengthen the oppressed, not the oppressor.
Whether fundamental inequality will deepen or decrease in the next period will depend ultimately on whether the benefits of a rise in productivity, if the Cubans achieve this, are socially shared rather than concentrated in the hands of individuals.
The wage incentive decreed by the Cuban government seems likely to be considerably less stratifying in its effects by far than the tourist industry and remittances from the United States, not to mention the period of “dollarization,” have been. (I leave aside here the significant political advantages of tourism for the Cuban revolution internationally.)
Why workers need material incentives
The purpose of the new incentive is an elementary but perfectly legitimate one — to inspire workers to intensify their labor, take better care of their machines, and so on.
This is an attempt to move the working class, the agricultural workers, and the society as a whole (not just individual model workers) away from the truly demoralizing and corrupting “they pretend to pay us, we pretend to work” mentality. This approach has social roots in the conservative and bureaucratic administration of factories, and became the norm in the former Soviet and East European post-capitalist societies. But it also affects revolutionary societies like Cuba which for long periods have had to grind away at a relatively low subsistence level, which can pass for “equality” when viewed from the outside. To yield to it is to accept the perspective of eternal stagnation.
This present “incentive” is linked organically to the perspective that work can better the conditions of all; that it can make their country stronger relative to the imperialist enemies; and that it will make Cuba a more effective contributor to progress and unification in Latin America.
Have the Cubans become bourgeois economists?
Adler insists that the Cuban leadership has “fallen for the fallacy that the wages in market economies are determined by productivity.” There are two unexamined givens here for the price of one. First, that the wage incentive demonstrates a decision to imitate the methods of “market economies.” Despite Adler’s insistence on the world-shaking significance of the adoption of this wage incentive, no evidence is provided.
The other unexamined given in Adler’s assertion is that the Cuban leaders believe that wages in capitalist societies are determined by productivity. No evidence beyond the mere fact of the wage incentive is presented to support this.
But Raul and other Cuban leaders are quite insistent that they are Marxists. And Marx explained that wages are determined in capitalist societies by the cost of reproduction of labor power (that is, of workers), as affected by such factors as the relationship of forces in the class struggle, and (in imperialist countries) the added flexibility the ruling classes gain by raking in super-profits from around the world.
There is plenty of evidence that the Cuban leaders take Marx’s analysis seriously.
Labor productivity exists and is measurable. (Adler disagrees here; see appendix.) Today in capitalist countries it gets measured in the interests of the capitalists, and workers find the time and motion man standing over their shoulder, looking for ways to squeeze more out of them to enrich the boss.
But after a socialist revolution, the productivity of labor remains a key guideline of how far forward the new society has gone and can go. The increase in the productivity of labor is one of the central material forces for progress.
Cuba’s grim future, according to Adler
Adler concludes that the Cuban leaders will probably observe the pay differentials that exist in the West and implement them at home. “What’s in store for Cuba is the standard menu that comes with wage inequality, including poor public education but first-rate private schools, insufficient or no health care for the majority but excellent medical care for CEOs and government officials, a substantial increase in the length of the working day, with fewer vacations and job insecurity to boot.”
Wow! Talk about how great oaks from little acorns grow! The alleged acorn in this case being the proffering of a modest wage increase to encourage increases in labor productivity. And the great oak being the destruction of public education, the elimination of universal medical care, growing illiteracy, a declining life span for the people, mass poverty and so on! And no need to show how any of this comes about, let alone why it must come about!
But I think the matter can be presented more accurately in the opposite way. The advanced and still advancing systems of medical care and universal public education in Cuba require a growing productivity of labor. Socialist good will on the part of the leaders or the masses is not enough, and stagnation will not do. If the conditions of the “special period” had gone on indefinitely these revolutionary social institutions would have begun to fray and disintegrate along with the revolution itself. But Cuba survived the special period. Events — particularly in Latin America — have sharply reduced the relative isolation that affected Cuba after the fall of the Soviet bloc, and opened up new prospects and perspectives for the revolution.
It takes more than positive ideals and ethics to create a socialist society. The possibility of a socialist future for the world was opened up in part by the increase in the productivity of labor represented by the creation and rise of the modern working class. And worldwide, further increases in the productivity of labor, oriented in a quite different social direction, are needed if socialism is to be won.
Gorbachev’s Soviet Union and Raulista Cuba
Gorbachev took some measures similar to those in Cuba at the beginning of his regime. I didn’t find the measures at that initial point wildly objectionable either.
But the context proved to be all-important. The Russian revolution was one in which the forward drive of the workers and peasants as governing classes was decisively pushed back from the mid-1920s to the 1930s. A caste of officials took command of the state, and the party leadership was purged of all revolutionary-minded elements. The noncapitalist state survived with sharp ups and downs, but beginning in the late 1960s, stagnation and decay became the norm in the government and economy and profound demoralization took hold among the people.
By the time Gorbachev took power, matters had come to a pass where neither moral nor material nor social incentives could move things forward. Could you imagine appealing to the workers to produce more based on ideals or the future of socialism in those years?
In Cuba, however, the revolution is alive, a tribute to the capacities and revolutionary dedication of the leaders as well as the masses. The people are different. The leadership is different. The morale is different. In Cuba, a combination of material, moral, and social and political incentives has the potential to continue the forward motion. In some respects, it was one such combination that brought them through the very difficult “special period” after the collapse of their Soviet bloc allies.
Cuba not turning away from socialism
The Cuban revolution is socialist in the national-class-social character of the revolution, the government, and in the aspirations and goals of much of the population. The nationalization of the factories and other industries and resources has given the people an important weapon for defending and advancing their interests and their perspective. I see no sign that this is being abandoned.
Is Cuba abandoning moral and social incentives? Are the internationalist missions of Cuban doctors, teachers, and others being abandoned? Is there any evidence that Cuban doctors and teachers routinely demand bribes for their services, as happened in the Soviet bloc? Or is Cuba giving up on internationalist support to countries that stand up to imperialism, especially those that undertake progressive social changes as well?
The army, though substantially draftee, remains from all reports highly motivated politically and socially, and internationalist in outlook. The officers and ranks are not concerned only about their own material benefits.
Cuba, though no communist utopia by any means, remains a long, long way from a dog-eat-dog society, including with the new organization of wages.
But Cuba cannot and will not reach socialism under present world circumstances. The revolution must hold the fort and gain more ground as best the Cubans can until more allies and participating countries can be won for the cause. That is the context of these changes, which seem moderate and reasonable to me, and seem to have been greeted favorably by the working people of the country.
Of course, whether these moves will have the desired results is another question. That involves many questions, not least the parlous condition of the world capitalist economy and the fate of the national salvation, anti-imperialist, and social transformations being attempted in a growing number of Latin American countries. Cuba is capable of standing alone for a long time. But things will surely be much better if they are less and less isolated instead.
If the new measures turn out to be flawed or imperfect, well, they can be corrected, adjusted, reversed, or extended — whatever is needed for the preservation of Cuba as a revolutionary state and society in an imperialist-dominated world. I tend to think that the masses can make themselves heard in Cuba through many formal and informal channels (more formal channels would be good, in my opinion). And I am convinced that their leadership has the revolutionary conviction and capacity to correct errors if that proves to be needed.
Fred Feldman, a factory worker who lives in Newark, New Jersey, is a contributing editor of Socialist Voice,. He has been an activist, beginning in the U.S. civil rights movement, for 47 years.
References
Moshe Adler, “Of Pay and Productivity: Is Cuba Done With Equality?” http://www.counterpunch.org/adler06202008.html
Helen Yaffe, “Cuba’s Wage Changes,” www.guardian.co.uk/commentisfree/2008/jun/20/cuba?gusrc=rss&feed=fromtheguardian
Appendix: Adler vs. Marx on workers as producers
Adler believes that the whole idea that the productivity of labor can be increased is a fallacy, and that attempting this in Cuba must lead to catastrophe:
“As economist David Ricardo explained some two hundred years ago, the very idea of ‘worker productivity’ is a hollow concept. Not only can a worker’s productivity not be measured, it cannot even be defined.
“Ricardo pointed out that production is normally performed by workers who work not with their bare hands but with machines, producing not a whole product but instead performing only one step in a production process that has many. Therefore, Ricardo explained, a worker’s productivity cannot be separated either from the productivity of the machine that she works with, or from the productivity of the rest of the workers in the production process. When a skyscraper goes up, how much of a building would there be with only a crane operator but no crane, or with only crane and operator but no workers to pour the concrete? The workers and machines together form a team, and measuring the productivity of the team is easy.”
I doubt the accuracy of Adler’s version of Ricardo’s theory.
Adler argues essentially that worker productivity cannot be measured because in production, human beings work as team members with other beings called machines. Who can tell what the human produces and what the machine produces? As the King of Siam says in The King and I, “Tis a puzzlement!”
Except in Marx, of course. He explains it almost from the get-go.
And his argument, in this case, is readily comprehensible from the standpoint elementary common sense and natural materialism — unlike other arguments of Marx’s, which, though equally correct, run counter to the ordinary appearance of things.
Human labour produces machines. Machines are not beings, but simply products of human labor– in many ways the central, most indispensable products of human labor today. They are produced by workers, laboring farmers, and artisans. Everything that is not produced by nature (including by non-human animals) is produced by human beings.
Machines produce nothing, except as tools created and utilized by human beings for the purpose of enabling human beings to produce more with less effort. A part of the machine’s power is expended in producing each product, and as a result a portion of the cost of production of the machine enters into the cost of production of each item produced by the human laborer utilizing the machine.
And that’s that. The machine has no productivity as such, only as an instrument for use in human production. It is created by human production to serve human purposes.
Of course, if the point ever comes where machines become producers and creators in their own right, I will be all for welcoming R2D2 and C3PO into unions, explaining to them socialist views on everything from the Cuban revolution to McKinney and Obama. I will be glad to enroll them in a revolutionary international movement, and fight side by side with them against the Dark Side.
But until that actually happens, I think that Marx’s approach works better than Adler’s. Working people, not machines, are the producers of goods, including machines. The power of machines to contribute to production is a human product, as are the goods that human beings produce with machines as their tools.
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Comments
1) Richard Fidler , 14/07/2008
A. It is not really pure “urban legend” to say that the pay for street sweepers and brain surgeons differs by only a few dollars a month. The key words here are “pay” and “dollars”. Wage differentials have traditionally, since the early years of the revolution, varied a bit (the scales being set by the government, albeit in consultation with the CTC), but figures I have seen indicate a ratio of highest to lowest in the range of 5:1. For example, if the highest wage were 1000 pesos a month, the lowest would be 200 pesos – figures that are within the current range I believe. But if these amounts are converted from pesos (the internal Cuban currency) to “dollars” (including CUCs, basically the U.S. dollar discounted by 10%), we have to adjust for the value of the peso in CUCs, which is 24 pesos to the CUC dollar. So 1000 pesos is, in dollar terms approximately, 40 dollars, while 200 pesos is 8 dollars, which yields a differential of 32 dollars a month. Not much, in buying power. Our hypothetical brain surgeon will take some time before she or he can purchase a personal computer, which goes for about $1500 (CUCs) in Cuba.
Cubans are well aware of these differences. On the first day of my most recent visit to Cuba this last March, I was in a farmers’ market in Vedado, Havana. A woman was selling ice cream for a posted price of $1. I gave her one CUC (the only currency tourists are supposed to use). At first she refused to take it, then reconsidered and laboriously counted out 23 pesos in change (and then refused my proffered tip!). I found that the pesos were handy later on for purchasing newspapers, at 1 peso each, for example.
As to “pay”, the obvious point is that “incomes” in Cuba can’t validly be measured by individual wages; the social wage includes free health care and education, low-cost housing, etc. And the major contradiction in Cuba, the major source of disparities, is of course the contrast between the CUC economy, to which only half the Cubans have access to any degree, and the peso economy. The new permission to buy cellphones and computers will only be exercisible by those with access to CUCs, and lots of them. This has implications for proletarian democracy that go beyond the important precondition that workers need to be relieved of basic survival exigencies if they are to be able to play any decision-making role.
B. In the appendix, comrade Feldman addresses Adler’s Ricardian point about “productivity of machines”, but it seems to me that productivity is in fact already measured in Cuba according to enterprises and industries, that is, in collective production environments, and those productivity differences are reflected to some degree in the wage scales set by the government (with CTC consultation). My understanding is that the government is now to increase the weight of the productivity factor in wage determination, just as it did earlier in factoring in education, age and other considerations in order to manage income distribution, employment patterns, etc.
I want to thank Richard Fidler for his critical comments, just the kind of concrete information we need. I submitted Richard’s comments to the Marxism List, and Walter Lippmann submitted the following comment:
There’s no such rule that the convertibles (CUC) are the only currency tourists are supposed to use. Any person can use either currency when whichever is appropriate. In this case, the vendor was simply giving the correct change, since the ice cream at that location was being sold in moneda nacional, regular Cuban pesos. Offering to pay for an item which is sold in moneda nacional with CUC simply means that an honest vendor - of whom there are more than a few, has to calculate and give the proper change. No biggie.
Regular and convertible pesos are exchanged at the exising rate in places (CADECAS), or by vendors.
By the way, most newspapers, like Granma and Juventud Rebelde, which are eight-page tabloids, have a cover price of twenty CENTAVOS, which is less than one single penny U.S. Or Canadian. That is the price one is supposed to pay for it at a kiosk. What really happens is that the individual vendors buy bundles at forty centavos per copy from the kiosk workers, and then resell them at one peso, making a “profit” of sixty centavos per copy. All of this in moneda nacional. This is one way that older people who have no other incomes supplement their meager pensions.
3) Ian Beeching 20/07/2008
I would like to challenge the idea that “after a socialist revolution, the productivity of labour remains a key guideline of how far forward the new society has gone and can go. The increase in the productivity of labour is one of the central material forces for progress.”
In an advanced industrialized country like Canada I do not believe the main task would be of increasing productivity but rather reorganizing industry and redistributing what is produced. Productivity is key in underdeveloped countries but in advanced industrialized countries productivity of labour is less met by increasing education and more by forcing workers to work harder and breaking unions.
I believe one of the leading struggles of a socialist revolution in Canada would be to shift production away from rampant consumerism towards environmentally sustainable goods, and towards cleaning the environment.
It would also be a key point for Canada to share its wealth with underdeveloped countries. In this respect I think a redistribution of wealth with an emphasis on providing technical and material assistance to third world countries outranks the need to increase production at home.
4) Fred Feldman 29/07/2008
I agree, in full or substantially, with much of what Ian writes.
The differences concentrate in this paragraph:
“In an advanced industrialized country like Canada I do not believe the main task would be of increasing productivity but rather reorganizing industry and redistributing what is produced. Productivity is key in underdeveloped countries but in advanced industrialized countries productivity of labour is less met by increasing education and more by forcing workers to work harder and breaking unions.”
Here I think matters get confused by the dissolving different class and social relations into over-generalizations about “industrial” and “under-developed” countries. Better to consider class relations in the state and on the job, and the difference between imperialist states and oppressed nations.
The fact is that in every capitalist country, where capitalist social relations and capitalist production has become dominant, whether industial or undeveloped. the need for increased productivity of labor is “less met by increasing education and more by forcing workers to work harder and breaking unions.” In ALL such situations, not just the most industrialized, the drive for a higher productivity of labor stems not from meeting human needs but from the drive to reduce the value of labor power and claim larger shares of the surplus value being produced by the working people.
But the tendency to continually increase the productivity of labor is the key to capitalism’s relatively progressive role at one time. Without this accomplishment, the capacity to solve the problems and undo the devastation brought about by capitalism on a high level of culture would be excluded. In the end, whatever has been gained cannot be preserved and whatever has been damaged or wrecked cannot be corrected without continuing growth in the productivity of WORLD labor.
Note that I did not say that the increase in the productivity of labor will be the “main” task after the overthrow of capitalism in either former imperialist or oppressed nations. But other tasks will not be accomplished without or completely separable from further advances along that line, as Cuba has learned over the years. Note Raul Castro’s July 26 speech and Fidel’s Castro’s recent comments on education for examples of this kind of thinking, so distant both from dreams of the obsolescence of labor or from profit rather than human needs as the motive force of labor.
I agree with Ian about the tasks he lays out, and not just for former imperialist countries: reorganizing industry, environmental health, aiding the development and equalizing conditions of oppressed nations with those of the former imperialists. I think, though, that he places them in too purely a redistributive rather than productive framework. For instance he says socialist Canada must “share our wealth.” No workers in Canada, in their own class interests as well as out of human solidarity, must labor more to help end the inequality of the oppressed nations and peoples, internal and external.
We must LABOR. not just share the wealth, for the world, not just for ourselves.
Canadian working people will have to work to reconstruct not just industry, but the world on new foundations.
I think that not only a greater degree of energy austerity (to give just one example) will be needed — affirmative action measures to redistribute energy in favor of the energy needs of the great majority of the world’s population. But I think this will also be a need to recast energy supplies for a needy world that will allow for increased access and use of energy safely. How will we deal, for instance, with the current growing dependence of oppressed nations on nuclear power for their energy supplies.
In my opinion, environmental needs will call for pretty much the complete reconstruction of modern industry on the basis of human needs, including the elementary human need for the preservation of the natural environment of which we are a part, but which we have been trained to treat as an obstacle to be gotten out of the way.
In some areas, with agriculture being likely one, this may require steps back in terms of productivity toward previous or slower productive metbods — which of course may also mean more as well as more intense labor by working people. But working people will also seek to get on the road of increasing productivity safely, the key to security, leisure, and much else.
All in all I think workers in Canada will be very busy after a revolution and will be working pretty hard if more healthily and comfortably. They won’t be ready to retire and spend their leisure time redistributing their accumulated wealth. They will be about as busy as workers anywhere else, I predict, and in many cases they will be working to create a new world for working people and the oppressed everywhere.
I am largely leaving aside a discussion of another central point — that is LABOR AS A HUMAN NEED, the source of all human intellectual and material creativity. This was central to Marx’s communist vision — that human beings need to break the fetters of class society and build anew in order to labor as free people. That, at least as much or even more than the need for rest and leisure, is at the heart of Marxism as a vision of a human society.
Thanks for your thought-provoking comment
(source http://www.socialistvoice.ca/?p=307)
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